China has emerged as the likely builder of Indonesia’s first high-speed rail line after Indonesian officials rejected Japan’s requirement for a government guarantee of loans, officials said recently.
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Experts say Indonesia’s poor infrastructure has been a major impediment to strong growth, but the state budget can only cover 30per cent of the estimated 450 billion dollars needed to build roads, railways, ports and power plants by 2020. The first trains will run in early 2019, reaching speeds of 250 kilometers (155 miles) an hour.
The Indonesian government repeatedly changed its mind about the railway project, before eventually agreeing to accept China’s bid for a high-speed line.
China has built thousands of kilometres of high-speed railway in recent years, but its safety standards have come under scrutiny – a 2011 crash killed at least 40 people and injured about 200.
“We will develop locations where stations will be placed for the Jakarta-Bandung corridor”, he said.
The competition between China and Japan for the rail project has been accompanied by many twists and turns as Indonesia weighed proposals and counterproposals.
The ambassador pointed out that it would serve as an Indonesia-China model of cooperation that is mutually beneficial to both countries.
Construction of the railway will largely be financed by China Development Bank with a 40-year loan and a grace period of 10 years.
Sahala also expected the Indonesia-China joint venture to expand its service to similar projects in Southeast Asia and Middle East in the future.
He explained that the government does not provide financing, except facilitate land acquisition.
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Wika owns 38 percent shares of the local consortium while state train operator Kereta Api Indonesia, state toll operator Jasa Marga and state plantation company Perkebunan Nusantara VIII control 25 percent, 12 percent and 25 percent respectively.
